32475 Sawmill Rd

Erhard, MN 56534

$1C-

3 bd · 3.0 ba · 1,716 sqft · Built 1980 · SingleFamily · Pending · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,320/mo
• Mortgage (P&I): −$0
• Tax + insurance: −$0
• HOA: −$0
• Vac / Maint / Mgmt: −$277
• Net cashflow: $1,043/mo
• Annual: $12,514/yr
• Cap rate: 1251424.36%
• Cash-on-cash: 4469350.24%
• DSCR: 198861.94
• 1% rule: 132007.00%
• Cash to close: $0

Investor read

• This is a 3-bed/3.0-bath single-family listed at $1.
• At list price, monthly cash flow is $1k ($13k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $1).
• It's been on market 30 days — a 2% lower offer ($0) is reasonable based on typical stale-listing flexibility.
• Location reads 61/100 on livability (#742 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A-; Watch: health & safety D+, crime D, amenities F.
• Fergus Falls Public School District (town): math 59% / reading 61% proficiency, ranked #46 of 301 in MN (top 15%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Cleveland Elementary (math 71% / reading 60%, grade B+, #123 of 857 statewide, top 15%, 369 students, 47% FRL); Kennedy Middle School (math 57% / reading 63%, grade B, #25 of 258 statewide, top 9%, 769 students, 43% FRL); Kennedy High School (math 52% / reading 62%, grade C, #64 of 471 statewide, top 16%, 685 students, 33% FRL) — zoned schools average 41% FRL vs 24% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 10 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• At projected returns (6.7% appreciation + 3.0% rent growth), your $0 cash investment doubles in ~1 year — after that, you're playing with house money.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.